Israel Chemicals Drops as Barclays Cuts Outlook: Tel Aviv Mover

June 24 (Bloomberg) -- Israel Chemicals Ltd. fell to the
lowest level since 2011 as Barclays Plc. cut the fertilizer
maker’s price estimate by 15 percent on concern a government
review of natural-resource royalties may lead to lower profits.

Shares of the company which extracts minerals from the Dead
Sea to make fertilizers and potash dropped 1 percent to 36.43
shekels, the lowest since December 2011, at the close in Tel
Aviv. Controlling shareholder Israel Corp. declined 1.7 percent,
while the benchmark TA-25 Index decreased 1 percent.

Finance Minister Yair Lapid, who took office in March and
is seeking to narrow the budget deficit, said in April natural
resources are a public asset and the people should be the first
to benefit from them. New taxation would mean revising an
agreement the government signed with Israel Chemicals last year
that raised royalties on potash sales to 10 percent from 5
percent. The company said last month that a lack of clarity
about government policies risks driving away foreign investors.

“Given a high probability that royalties will rise,
despite having just been set in early 2012, we cut our price
target to 47 shekels,” Barclays analyst Joseph Wolf wrote in an
e-mailed note today, while maintaining his overweight
recommendation. “We see the royalties uncertainty as the
largest risk currently.”

Israel Chemicals shares have decreased 9 percent since the
government appointed a panel led by Eytan Sheshinski to review
tax and royalty policies on June 17. Sheshinski led a committee
three years ago whose recommendations formed the foundation for
the government’s decision to more than double its share of gas
and oil profits.

Twelve analysts have a hold rating on the shares, while six
recommend buying them, data compiled by Bloomberg show.